A debt jubilee to tackle the Covid-19 health and economic crisis

Over 200 networks and organisations have signed a statement calling for cancellation of debt payments in 2020.

The statement is available here in English
La déclaration est disponible ici en français
La declaración está disponible aquí en español
A declaração está disponível aqui em português

البيان متوفر هنا باللغة العربية

And here is the full text and signatories in English:

A debt jubilee to tackle the Covid-19 health and economic crisis

1. What we are calling for

We, the under-signed organizations, aware of the severe impacts on hundreds of millions of people from the health, social and economic crises faced by countries in the global South as a result of Covid-19, urgently call for:

  • Cancellation of all external debt payments due to be made in 2020.
  • Provision of emergency additional finance which does not create debt.

All principal, interest and charges on sovereign external debt due in 2020 should be cancelled permanently, they should not accrue into the future. Cancelling debt payments is the fastest way to keep money in countries and free up resources to tackle the urgent health, social and economic crises resulting from the Covid-19 global pandemic.

2. Implementing cancellation of debt payments

Borrower governments have it within their power to stop making debt payments but they should not suffer any penalties for doing so. All lenders should therefore agree to the immediate cancellation of debt payments falling due in 2020, with no accrual of interest and charges and no penalties.

In the absence of a wider, multilaterally agreed debt cancellation, lenders should take the following steps:

  • Multilateral institutions, including the IMF and World Bank, should offer an immediate cancellation of all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries.
  • The IMF and World Bank should urge any country ceasing multilateral and/or bilateral debt payments to also cancel payments to private external lenders. Any new IMF and World Bank finance should be in the form of grants not loans, and require other lenders to reprofile the debt where sustainability is uncertain, or restructure their debt where it is unsustainable,[1] to help ensure money is used to support public policy priorities in response to the COVID-19 crisis, rather than to repay other lenders.
  • Lender governments, both Paris Club members and others such as China, Saudi Arabia and Kuwait, should cancel all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries. Ideally a debt cancellation should be coordinated between lenders but should not wait for them all to agree.
  • The G20 should support moves by any country to stop making payments on debt to private external lenders.
  • Key jurisdictions, especially the UK and New York, should pass legislation to prevent any lender suing a government for stopping debt payments in 2020.
  • Debt payment cancellations and additional finance should be free of economic policy conditionality promoting privatisation, deregulation and trade liberalisation. The crisis has been caused by exogenous shocks: developments over which countries in the global south had no control.
  • Debt payment cancellation and additional finance should be designed specifically to bolster public expenditure targeted at protecting the rights and needs of populations, especially to maintain and increase social protection and health spending in response to COVID-19 and ensure relief goes directly to benefit those in need.

3. Resolving the debt crisis

Many countries were in debt crisis before the Covid-19 crisis began. Many more will emerge from this crisis with even higher unsustainable debts. Immediate cancellation of debt payments should therefore be linked to a more comprehensive and long-term approach to debt crisis resolution. As such, to make debt restructuring more efficient, equitable and successful we call for:

  • The creation through the United Nations of a systematic, comprehensive and enforceable process for sovereign debt restructurings.[2]
  • The IMF to introduce clear guidelines on when a debt is unsustainable, and follow its policy only to lend to countries with unsustainable debts if there is a default or debt restructuring.[3]

A process to make these changes must begin before the end of 2020.

4. The impacts of Covid-19

The global Covid-19 crisis has led to falls in commodity prices, an increase in future borrowing costs for global South governments[4], and contributed to the largest ever capital outflow from developing countries.[5] Government revenues will fall as a result, and debt payments will increase at the same time that countries need to expand healthcare and social protection in response to the crisis. Developing countries had already been facing heightened debt vulnerabilities and rising debt costs before the Covid-19 outbreak.[6] The scale of the public health crisis and need for rapid policy responses means vital government resources must be urgently directed towards the needs of populations and not diverted to lenders. The outbreaks of Covid-19 so far show that time is essential. Governments need to have resources for decisive action today. Any delay will make the pandemic more difficult to control and a later repair of economic damage more costly, especially for borrower countries.

We estimate cancellation of external debt payments in 2020 for 69 countries[7] classified by the IMF as Lower Income Economies and for which data is available, would save $19.5 billion in external debt payments to bilateral and multilateral lenders in 2020, and $6 billion in external debt payments to private lenders. If it was extended to 2021 it would save a further $18.7 billion in multilateral and bilateral payments and $6.2 billion in external payments to private lenders.[8]

5. Support for action on debt cancellation

African Finance Ministers have called for a suspension of all interest payments in 2020, and all principal and interest payments by fragile states.[9] The IMF and World Bank have called for a suspension of all debt payments by the poorest countries to other governments.[10] The United Nations Secretary General has called for debt restructuring, including waivers on interest payments in 2020.[11] Prime Minister of Pakistan Imran Khan has called for a debt write-off for his and other vulnerable countries.[12] Ecuador’s Congress has also called on the government to suspend debt payments.[13] In early March Lebanon defaulted on private external debt payments and has announced it will stop paying all foreign currency bonds.[14] Ethiopian Prime Minister Abiy Ahmed Ali has called for a widespread debt write-off, with any remaining debt not payable for ten years and limiting debt payments to 10% of exports.[15]

Signatories (273 networks and organisations in total)

International organisations and regional networks

  1. African Forum and Network on Debt and Development (Afrodad)
  2. Asian Peoples’ Movement on Debt and Development (APMDD)
  3. Latin American Network for Economic and Social Justice (Latindadd)
  4. European Network on Debt and Development (Eurodad)
  5. Arab NGO Network For Development (ANND)
  6. Red Jubileo Sur/Américas
  7. Third World Network (TWN)
  8. Focus on the Global South
  9. Womankind Worldwide
  10. Stakeholder Group of Persons with Disabilities
  11. Disabled People’s International
  12. CADTM international
  13. Oxfam
  14. ActionAid International
  15. CCFD-Terre Solidaire
  16. CIDSE
  17. Christian Aid
  18. Brot für die Welt
  19. The ONE Campaign
  20. Save the Children
  21. Avaaz
  22. Greenpeace International
  23. Fundación Educación y Cooperación – EDUCO
  24. Society for International Development
  25. Centre for Economic and Social Rights
  26. 350.org
  27. Medical Mission Sisters
  28. Médecins sans frontieres
  29. Africa Development Interchange Network
  30. Global Policy Forum
  31. Debt Relief International
  32. Youth for Tax Justice Network (YTJN)
  33. Fair Finance International
  34. Oil Change International
  35. Missionary Oblates of Mary Immaculate
  36. Sisters of Charity of Nazareth Congregational Leadership
  37. Federación Internacional Fe y Alegría
  38. Platform to Protect Whistleblowers in Africa (PPLAAF)
  39. International Budget Partnership
  40. Y Care International
  41. Corporate Europe Observatory
  42. Congregation of Our Lady of Charity of the Good Shepherd (Global)
  43. Migrant Forum in Asia
  44. Aksi! for gender, social and ecological justice
  45. Africa Europe Faith & Justice Network (Europe)
  46. GCAP – Global Call for Action against Poverty
  47. Education International
  48. North African Food Sovereignty Network (NAFSN)
  49. Tax and Fiscal Justice Asia
  50. Validity Foundation – Mental Disability Advocacy Centre
  51. VIVAT International
  52. RIPESS – Intercontinental network for the promotion of Social Solidarity Economy
  53. Tax Justice Network
  54. Economistas sin Fronteras
  55. Feminist Task Force
  56. Third World Network Africa
  57. Religious of the Sacred Heart of Mary NGO
  58. IBON International
  59. Arab Forum for the Rights of Persons with Disabilities
  60. Plataforma Mercosur Social y Solidario
  61. Pax Christi
  62. Social Justice in Global Development
  63. Anglican Church of Southern Africa Environmental Network

National organisations

  1. MIFRO – MISSÃO sem FRONTEIRAS, Angola
  2. CLACSO Argentina
  3. Aid/Watch, Australia
  4. Australian Federation of Disability Organisations (DPI Australia)
  5. Jubilee Australia
  6. DKA Austria (Dreikönigsakion Hilfswerk der Katholischen Jungschar)
  7. KOO Austria
  8. Südwind Verein für Entwicklungspolitik und globale Gerechtigkeit, Austria
  9. Bangladesh Krishok Federation
  10. NRDS, Bangladesh
  11. 11.11, Belgium
  12. Broederlijk Delen, Belgium
  13. CNCD-11.11.11, Belgium
  14. Entraide et fraternité, Belgium
  15. Associação Alternativa Terrazul, Brazil
  16. Central de Cooperativas Unisol Brasil
  17. Federação Nacional do Fisco Estadual e Distrital (FENAFISCO), Brazil
  18. FOAESP – Fórum das Ong Aids do estado de São Paulo
  19. Gestos (HIV and AIDS, communication, gender), Brazil
  20. Grupo de Resistência Asa Branca (GRAB), Brazil
  21. Instituto de Justiça Fiscal (IJF), Brazil
  22. Outras Palavras Comunicação Compartilhada, Brazil
  23. Social Action for Community and Development, Cambodia
  24. Women’s Network for Unity (WNU), Cambodia
  25. Worker’s Information Center (WIC), Cambodia
  26. Plate Forme d’Information et d’Action sur la Dette (PFIAD), Cameroon
  27. AidWatch Canada
  28. Canadian Council for International Co-operation
  29. Forum des Organsations Nationales Humanitaires et de Développement en RD Congo
  30. PC2D (RD.Congo) et Caritas Congo ASBL
  31. Commission Justice et Paix de Pointe Noire, Republic of Congo
  32. Convention de la Societe Civile Ivoirienne (CSCI)
  33. Plate forme d’autonomisation des organisations de jeunesse de Côté d’Ivoire(PAOJCI)
  34. Ecumenical Academy, Czech Republic
  35. ActionAid Denmark
  36. Jubileo 2000 Red Ecuador
  37. Finn Church Aid, Finland
  38. Action contre la Faim, France
  39. Amis de la Terre France
  40. Attac France
  41. CADTM France
  42. CCFD Terre-Solidaire, France
  43. Centre de Recherche et d’Information pour le Développement (CRID), France
  44. Comité français pour la Solidarité Internationationale (CFSI)
  45. Confédération Générale du Travail (CGT), France
  46. Coordination SUD, France
  47. Equipop, France
  48. Global Health Advocates France
  49. Grouep Initiatives, France
  50. Pax Christi France
  51. Plateforme Française Dette & Développement (PFDD), France
  52. Réseau Foi & Justice Afrique Europe antennne France
  53. Solidaires Finances Publiques, France
  54. act for transformation, Germany
  55. Aktion gegen den Hunger, Germany
  56. Bischöfliches Hilfswerk MISEREOR, Germany
  57. Bündnis Eine Welt Schleswig-Holstein e.V.
  58. DEAB, Germany
  59. Eine Welt Forum Freiburg e.V., Germany
  60. de – Entwicklung braucht Entschuldung (Jubilee Germany)
  61. hl redaction, Germany
  62. Informationsstelle Peru, Germany
  63. Netzwerk Africa Deutschland
  64. Transform! Europe, EU
  65. Abibiman Foundation, Ghana
  66. Abibinsroma Foundation
  67. Alliance for Empowering Rural Communities, Ghana
  68. Debtfree, Greece
  69. UndebtedWorld, Greece
  70. Plateforme d’Information et d’Action sur la Dette et le Développement- Guinée (PIADD)
  71. Plateforme nationale des Citoyens Unis pour le Développement (PCUD)
  72. Fe Y Alegria Honduras
  73. CROMO Foundation, Hungary
  74. DemNet Hungary
  75. Friends of the Earth Hungary
  76. Association For Promotion Sustainable Development, India
  77. Environics Trust, India
  78. Indian Social Action Forum
  79. Madhyam, India
  80. Mines, Minerals & PEOPLE, India
  81. Indonesia Water Community of Practice
  82. Solidaritas Perempuan (Women’ Solidarity for Human Rights), Indonesia
  83. Wahana Lingkungan Hidup Indonesia (WALHI)
  84. 80:20 Educating and Acting for a Better World, Ireland
  85. ActionAid Ireland
  86. Centre for Global Education, Ireland
  87. Christian Aid Ireland
  88. Columban Missionaries Ireland
  89. Comhlámh (Ireland)
  90. Financial Justice Ireland
  91. Friends of the Earth Ireland
  92. Jesuit Centre for Faith and Justice, Ireland
  93. Sisters of Our Lady of Apostles (Irish Province)
  94. SMA Justice Office, Society of African Missions, Ireland
  95. Trócaire, Ireland
  96. Association of Italian NGOs
  97. Associazione Comunita’ Papa Giovanni XXIII (APG23), Italy
  98. CIPSI, Italy
  99. Emergenza Sorrisi, Italy
  100. FOCSIV Italian Federation Christian Volunteering Service
  101. GCAP Italy
  102. Institute of Public Finance Kenya
  103. Lebanese Union of Persons with Physical Disabilities (LUPD)
  104. Sustainable Development Institute, Liberia
  105. Catholic Commission for Justice and Peace of the Archdiocese of Lilongwe (CCJP Lilongwe- Malawi)
  106. Centre for Social Concern, Malawi
  107. Centre for Social Accountability & Transparency, Malawi
  108. Economics Association of Malawi
  109. Development Communications Trust, Malawi
  110. Integrity Platform, Malawi
  111. Malawi Economic Justice Network
  112. Youth and Society, Malawi
  113. Maldives Association of Persons with Disabilities
  114. Halley Movement Coalition, Mauritius
  115. Equidad de Género: Ciudadanía, Trabajo y Familia, Mexico
  116. Observatorio Mexicano de la Crisis
  117. Youth Government of Morocco
  118. associacao Luarte – arte, cidadania e transformacao, Mozambique
  119. JOINT Liga de ONGs em Mocambique
  120. Mozambique Budget Monitoring Forum
  121. Mozambican Debt Group
  122. ALTSEAN-Burma, Myanmar
  123. National Campaign for Sustainable Development Nepal
  124. Both ENDS, Netherlands
  125. Cordaid, Netherlands
  126. GCAP Nicaragua
  127. BudgIT Foundation, Nigeria
  128. Attac Norway
  129. Debt Justice Norway
  130. Norwegian Church Aid (NCA)
  131. Norwegian People’s Aid
  132. Spire, Norway
  133. The Norwegian Council for Africa
  134. AwazCDS-Pakistan
  135. Community Initiatives for Development in Pakistan-CIDP
  136. Freedom from Debt Campaign of Pakistan
  137. Institute for Social & Economic Justice, Pakistan
  138. Pakistan Development Alliance
  139. Pakistan Fisher Folk Forum
  140. Pakistan Kissan Rabita Committee
  141. Freedom from Debt Coalition, Philippines
  142. Sanlakas Philippines
  143. ACEP – Associação para a Cooperação Entre os Povos, Portugal
  144. CIDAC – Centro de Intervenção para o Desenvolvimento Amílcar Cabral, Portugal
  145. FEC – Fundação Fé e Cooperação, Portugal
  146. Fundação Gonçalo da Silveira, Portugal
  147. Instituto Marquês de Valle Flôr (IMVF)
  148. MONTE, Portugal
  149. Oikos – Cooperação e Desenvolvimento, Portugal
  150. Par-Respostas Sociais, Portugal
  151. Plataforma Portuguesa das ONGD, Portugal
  152. Veterinarios sem Fronteiras Portugal
  153. ZERO – Association for the Sustainability of the Earth System, Portugal
  154. Federação das ONG em São Tomé e Príncipe
  155. Budget Advocacy Network, Sierra Leone
  156. Enabanda, Slovenia
  157. ISCOMET Institute for Ethnic and Regional Studies, Slovenia
  158. Alianza por la Solidaridad-Action Aid España
  159. org, Spain
  160. Ecologistas en Acción, Spain
  161. Fundación Entreculturas, Spain
  162. Greenpeace Spain
  163. Ingeniería sin Fronteras, Spain
  164. cat – Organitzacions per a la Justícia Global – Catalunya
  165. Observatorio de la Deuda en la Globalización, Spain
  166. Observatorio de Multinacionales en América Latina (OMAL)-Paz con Dignidad, Spain
  167. Plataforma Auditoría Ciudadana de la Deuda, Spain
  168. Centre for Environmental Justice, Sri Lanka
  169. Act Church of Sweden
  170. Diakonia, Sweden
  171. Alliance Sud, Switzerland
  172. Fastenopfer, Switzerland
  173. KEESA/ Swiss ADR Campaign, Switzerland
  174. Climate Watch Thailand
  175. Observatoire Tunisien de l’Economie, Tunisia
  176. SEATINI, Uganda
  177. Action for Argentina, UK
  178. Action for Southern Africa, UK
  179. Bond, UK
  180. Bretton Woods Project, UK
  181. Cafod (Catholic Agency for Overseas Development), UK
  182. Christians on the Left, UK
  183. Gender and Development Network, UK
  184. Global Justice Now, UK
  185. Health Poverty Action, UK
  186. Jubilee Debt Campaign, UK
  187. Jubilee Scotland
  188. Stamp Out Poverty, UK
  189. STOPAIDS, UK
  190. Tearfund, UK
  191. The Equality Trust, UK
  192. War on Want, UK
  193. Trademark Belfast
  194. Jubilee USA Network
  195. Uganda Debt Network
  196. Maryknoll Office for Global Concerns, US
  197. Sisters of Charity Federation, US/Canada
  198. Missionary Society of St Columban, US
  199. United States International Council on Disabilities
  200. ActionAid Zambia
  201. Campaign for Active Voter Engagement in Zambia
  202. Caritas Zambia
  203. Centre for Trade Policy and Development, Zambia
  204. Civil Society for Poverty for Poverty Reduction, Zambia
  205. CUTS International, Zambia
  206. Jesuit Centre for Theological Reflection (JCTR), Zambia
  207. Planned Governance Network, Zambia
  208. Transparency International Zambia
  209. Zambia Civic Education Association
  210. Zimbabwe Coalition on Debt and Development

References

[1] Under IMF policy if a government’s debt is unsustainable a full restructuring or default on the debt is meant to take place during a loan programme. A restructuring is a change in the terms of the debt which lowers the amount a lender will receive back. If sustainability of the debt is uncertain, a reprofiling is meant to take place. This moves the date of debt payments into the future so that lenders are not effectively paid off by IMF loans.

[2] See ‘We can work it out: 10 civil society principles for sovereign debt resolution’ https://eurodad.org/Entries/view/1547087/2019/09/17/We-can-work-it-out-10-civil-society-principles-for-sovereign-debt-resolution

[3] See more on this policy at https://jubileedebt.org.uk/wp-content/uploads/2019/10/IMF-policy-on-debt-restructurings_English_10.19-1.pdf

[4] https://jubileedebt.org.uk/uncategorized/coronavirus-worsens-debt-crisis-in-poor-countries

[5] https://www.theguardian.com/world/2020/mar/23/g20-finance-ministers-talks-hampered-by-us-china-posturing-coronavirus

[6] https://www.worldbank.org/en/news/press-release/2019/12/19/debt-surge-in-emerging-and-developing-economies-is-largest-fastest-in-50-years

[7] These are not all the countries which need debt suspension. As defined by the IMF, LIEs include 59 countries eligible for IFI concessional financing, 13 middle-income small states and four countries that have graduated from concessionality eligibility since 2010.

[8] Research by Eurodad https://eurodad.org/debt_moratorium 

[9] https://www.uneca.org/stories/african-finance-ministers-call-coordinated-covid-19-response-mitigate-adverse-impact

[10] https://www.ft.com/content/6eca167c-6ec0-11ea-9bca-bf503995cd6f

[11] https://www.un.org/sg/en/content/sg/note-correspondents/2020-03-24/note-correspondents-letter-the-secretary-general-g-20-members

[12] https://www.brecorder.com/2020/03/17/580790/pm-wants-world-to-consider-writing-off-pakistans-debt-to-help-cope-with-coronavirus/

[13] https://www.bloomberg.com/news/articles/2020-03-23/ecuador-bonds-sink-as-congress-suggests-suspending-debt-payments

[14] https://www.nytimes.com/aponline/2020/03/23/world/middleeast/ap-ml-lebanon.html

[15] https://twitter.com/AbiyAhmedAli/status/1242378606543855616/photo/2

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